Answered: Etona company has two service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Requirement:

1. Assume that department C applies factory overhead based on units produced with an estimate of 5,000 units for the period. The actual units produced for the current period was 4800. If the company uses the step method in allocating service department costs, how much is the applied factory overhead of department C.

2. Compute for the overhead rate for department A if the company uses the direct method in allocating service department costs and the department applies overhead based on 18,000 direct labor hours.

3. Under the reciprocal method, what would be the total Engineering department cost?

Etona company has two service departments and three producing departments. The following data was
made available:
Service Departments
Producing Departments
Maintenance
Engineering
A
B
Maintenance Hrs
400
800
200
200
Engineering Hrs
400
800
400
400
Overhead Costs
P12,000
P54,000
P80,000
P90,000
P50,000

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